The company awarded Louisiana’s expensive Medicaid claims processing contract has received conflicting reviews from other states that use their service.
Washington state health agency officials speak glowingly about their dealings with Client Network Services Inc.
In South Dakota, where CNSI’s work is the subject of lawsuits, officials complain in court records of cost overruns and system defects.
Louisiana awarded the contract, worth about $300 million over the next 10 years, to a relative newcomer.
The decision led to intense questioning by state legislators. Two of the companies that lost the bid competition have filed official protests of the decision.
State Department of Health and Hospitals Secretary Bruce Greenstein is a former executive with CNSI.
Greenstein said early on he played no role in the evaluation of the proposals.
He irked legislators when he initially refused to identify the winner of the contract.
CNSI competitors — ACS State Healthcare Inc., of Atlanta, and Molina Medicaid Solutions, headquartered in Long Beach, Calif., have protests pending with the Jindal administration’s state purchasing agency.
The challenges include allegations that CNSI low-balled its costs in a proposal that had too many incorrect assumptions.
CNSI submitted a proposal to do the work for $184.9 million over the next 10 years.
The deadline for a decision on the protest is Friday.
Under the contract, CNSI would handle the claims and pay the invoices for health care provided to the uninsured people covered by the government Medicaid program, which accounts for roughly one-fourth of Louisiana’s population.
CNSI is primed to start working in Louisiana, getting a Baton Rouge office in place, as well as employees hired, said Stephen Smith, who will be the company’s lead manager here.
Smith said the federal government recently certified the system CNSI uses in Washington state.
“The system proposed for Louisiana is the system installed in Washington,” he said.
Under the rules, the federal government will fund 90 percent of the development costs and much of the administrative costs once the program is certified.
Washington state deputy assistant secretary of the Health Care Authority Heidi Robbins-Brown said that state is “very pleased” with CNSI.
Robbins-Brown said it took close to five years before the state activated the project. “We wanted to make sure that not only the technology worked, but that people were ready to interact with the system,” she said.
Robbins-Brown said the better part of a year-and-a-half was spent testing the system with the provider community and agency staff.
Early on, some physicians and medical clinics complained that the new computer system failed to pay valid claims for Medicaid reimbursement. The Seattle Times reported that some providers had stopped taking new Medicaid patients and others were threatening to do the same thing because of the problem.
The protests came from “very small providers who did not take the opportunity to test and train prior to the system going live,” Robbins-Brown said.
“The system never missed a single payment cycle,” she said.
In South Dakota, officials aren’t talking about the on-going dispute the state Department of Social Services has with CNSI.
Brenda Tidball-Zeltinger, the agency chief overseeing the project, did not return three phone messages seeking an interview.
Emily Curry, South Dakota’s Department of Social Services communications director, said, “At this time no comment.”
Officials with the Centers for Medicare and Medical Services, the federal agency that oversees Medicaid, declined to discuss the case through spokesman Brian T. Cook.
Settlement negotiations are under way. Centers for Medicare and Medicaid Services officials — anxious to modernize claims processing — are involved in discussions.
CNSI was awarded the South Dakota Medicaid claims processing system contract in June 2008.
There followed two years of disputes between CNSI and the state agency as costs mounted. Project costs had risen from the original $62.7 million contract amount to an estimated $80 million-plus, according to court records.
CNSI served notice that it would suspend work because it was not getting paid. Then, the state agency moved to end the contract, according to court records.
CNSI filed a lawsuit in December over services and training completed but unpaid. The state agency claimed that it had detected 154 defects and 130 problems that could not be solved.
CNSI said in court records that it was abiding by the contract.